I am author of the book "Caring for Our Parents" and resident fellow at The Urban Institute, where I am affiliated with the Tax Policy Center and the Program on Retirement Policy. I also write a tax and budget policy blog, TaxVox, which you may read at Forbes.com or at http://taxvox.taxpolicycenter.org/ Before joining Urban, I was a senior correspondent in the Washington bureau of Business Week.

States Expand their Medicaid Community-Based Services but Their Benefits Vary Widely

Slowly but surely, more people who receive Medicaid benefits for long-term supports and services are getting their care at home rather than in nursing facilities. Still, only about 3.3 million seniors and younger people with disabilities who require long-term care get such help at home—about 1 million more than in 2000.

Overall, the program now spends about $50 billion or 45 percent of its long-term care budget on home and community care, according to a new study by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. A decade ago, it spent about $20 billion.

Yet the number of people receiving home and community care, and the amount of money individual states put into that care, varies widely. For instance, in 2009 Medicaid spent an average of $15,371 per person on home and community care. But Illinois spent only about $5,200 while Tennessee spent more than $35,000.

These big state-to-state differences are important, especially since both federal Medicaid spending and state flexibility may be key issues in budget talks over the next year. If lawmakers give the program less money but more flexibility, these state variations could widen considerably.

Medicaid is the largest single payer of long-term supports and services, funding almost half of all paid long-term care. It dwarfs the benefits provided by private long-term care insurance or what people pay out of pocket. But the Medicaid program, run by the states but jointly funded by states and the federal government, is required to provide care only in nursing facilities.

States may also offer long-term services and supports to people living in the community but must first get federal permission. The feds also give them leeway in deciding how much care they fund and who gets it.

Nearly all states have home and community programs, but many reduce costs by restricting eligibility or limiting benefits. For instance, some states limit participation (and save money) by setting more restrictive rules for those applying for home care than for those getting care in a nursing facility.

Another way states save money is to allow only a limited number of participants in home care programs at any one time. Others are placed on a waiting list. Overall, more than a half-million Medicaid beneficiaries were waiting for home and community care in 2011, 75,000 more than in 2010. The average wait was more than two years, which is especially problematic for the frail elderly, many of who are likely to die before reaching the top of the list.

These wait lists vary widely for different populations and among states. For instance, in California only about 1,300 people who were aged and disabled were waiting for home and community care in 2011. In Louisiana, a much smaller state, 27,000 were waiting, and in Texas almost 44,000 were on the list for home care benefits.

Most people who need supports and services want to get that care at home. And states say they want to deliver such care in the community. But, as the Kaiser study shows, many states are still reluctant to provide that assistance through Medicaid. Their home and community-based programs exist on paper, but often are often insufficient for the needs of the frail elderly and those younger people with disabilities who are trying to stay at home.

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